A balanced scorecard is a management system that enables organizations to clarify their vision and strategy, and translate them into action. The balanced scorecard provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Balanced scorecards help companies prioritize performance from four perspectives and answer key business questions. The four perspectives are: the learning and growth perspective; the business process perspective; the customer perspective; and the financial perspective. The balanced scorecard may be used to develop metrics, collect data and analyze the data relative to each perspective.
A strategy map is a key component of the balanced scorecard. The strategy map is a visual representation of the various cause-and-effect relationships between a company's strategic goals, the internal processes to assist in achieving the goals, and the intangible assets required to execute those processes effectively. The strategy map provides the link between creating and executing a strategy. The strategy map shows the causal linkages between perspectives, objectives, key performance indicators, themes, and initiatives or a subset of these items. Software application programs have been developed that allow users to define scorecards and create corresponding strategy maps. For example, a scorecard may be defined by dragging and dropping shapes onto a page.